The Vroom-Yetton-Jargo model says that we can break down decisions based on leadership styles. The authors have divided decision leadership styles into three types, autocratic, consultative, and collaborate and then developed a schematic on which style would work best based on the type of decision faced.
I always am trying to bring back these models and approaches to investment management. The three leadership styles can easily be applied to investment decisions. The decision tree suggests that it makes perfect sense to have autocratic leadership in investment management when decisions have to made quickly and you have an expert as the leader. Trading is something that lends itself to autocratic leadership while determining strategic allocations may call for collaborative leadership. When doing fundamental research consultative leadership may be very helpful. The structure of a firm's leadership may truly determine potential success.
One hopes the right leadership style is used for the right decision.
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